Fraud Policy Background The corporate fraud policy is established to facilitate the development of controls, which will aid in the detection and prevention of fraud against the Research Foundation. It is the intent of the Research Foundation to promote consistent organization behavior by providing guidelines and assigning responsibility for the development of controls and conduct of investigations. Policy This policy applies to any irregularity, or suspected irregularity, involving any person employed by, representing or acting on behalf of the Research Foundation, or who is in a significant decision making capacity with respect to sponsored program activity as well as consultants, vendors, contractors, outside agencies doing business with employees of such agencies, and/or any other parties with a business relationship with the Research Foundation. The State University of New York has a separate policy for notification and investigation of suspected fraudulent activities. Any investigative activity required will be conducted without regard to the suspected wrongdoer’s length of service, position/title, or relationship to the Research Foundation. Management is responsible for the detection and prevention of fraud, misappropriation, and other irregularities. Fraud is defined as the intentional, false representation or concealment of a material fact for the purpose of inducing another to act upon it to his or her injury. Each member of the management team will be familiar with the types of improprieties that might occur within his or her area of responsibility, and be alert for any indication of irregularity. Upon request, the Office of Internal Audit will assist management in becoming familiar with fraud indicators. Actions Constituting Fraud The terms defalcation, misappropriation, and other fiscal irregularities refer to, and may include, but are not limited to: • Any dishonest or fraudulent act; • Forgery or alteration of any document or account belonging to the Research Foundation; • Forgery or alteration of a check, bank draft, or any other financial document; • Misappropriation of funds, supplies, or other assets • Impropriety in the handling or reporting of money or financial transactions; • Disclosing confidential and proprietary information to outside parties; • Accepting or seeking anything of material value from contractors, vendors or persons providing services/material to the Research Foundation, consistent with the guidelines established within the Conflict of Interest Policy Statement; • Destruction, removal or inappropriate use of records, furniture, fixtures and equipment; • Any activity which results in violation of sponsor terms involving sponsor funds or sponsor reporting; • Any similar or related irregularity. Investigation Responsibilities The Office of Internal Audit has the primary responsibility for the investigation of all suspected fraudulent acts as defined in the policy. If the investigation substantiates that fraudulent activities have occurred, the Office of Internal Audit will issue reports to appropriate designated personnel and to the Board of Directors through the Audit Committee. The Office of Internal Audit, in consultation with Management and the Office of General Counsel and Secretary, as appropriate, will organize an Investigation Team to investigate alleged fraudulent acts. Decisions to prosecute or refer the examination results to the appropriate law enforcement and/or regulatory agencies for independent investigation will be made by the Office of General Counsel and Secretary in consultation with the campus Operations Manger or designee, or, for employees of the Albany Corporate Office of the Research Foundation (Central Office), in consultation with the Executive Vice President of the Research Foundation, or the Executive Vice President’s designee. Confidentiality All information received by the Internal Audit Department is treated as confidential. When the campus Operations Manager or designee, or for employees of the Central Office, the Executive Vice President or designee, suspects dishonest or fraudulent activity, they will notify the Vice President, Internal Audit immediately, and should not attempt to personally conduct investigations or interviews/interrogations related to any suspected fraudulent act (See, Reporting Procedure, section below). Investigation results will not be disclosed or discussed with anyone other than those who have a legitimate need to know. This is important in order to avoid damaging the reputations of persons suspected, but subsequently found innocent of, wrongful conduct, and to protect the Research Foundation from potential civil liability. Authorization for Investigating Suspected Fraud Members of the Investigation Team will have: • Free and unrestricted access to all Research Foundation records and premises, whether owned or rented; and • The authority to examine, copy, and/or remove all or any portion of the contents of files, desks, cabinets, computer files and other storage facilities on the premises without prior knowledge or consent of any individual who may use or have custody of any such items or facilities when it is within the scope of their investigation. Reporting Procedures Any irregularity that is detected or suspected must be reported immediately to the Vice President, Internal Audit, who coordinates all investigations with the Office of General Counsel and Secretary and other affected areas, both internal and external. The Fraud Incident Report should be used to report all irregularities (See, Fraud Incident Report). All inquiries concerning the activity under investigation from the suspected individual, his or her attorney or representative, or any other inquirer should be directed to the Office of General Counsel and Secretary. The reporting individual should be informed of the following: • Do not contact the suspected individual in an effort to determine facts or demand restitution. • Do not discuss the case, facts, suspicions, or allegations with anyone unless specifically asked to do so by the Office of General Counsel and Secretary. Termination If an investigation results in a recommendation to terminate an individual, the recommendation will be reviewed for approval by the campus Operations Manager or designee, or for employees of the central office, by the Executive Vice President, or designee, for review and determination, in consultation with the Office of General Counsel and Secretary and the Office of Employee Services. Administration The Vice President, Internal Audit is responsible for the implementation and administration of this policy.
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